Trump plans rollback of
drug industry regulations
By Brad Dixon
6 February 2017
6 February 2017
Trump met last week
with pharmaceutical industry lobbyists and executives at the White House where
he announced his plans to drastically reduce the regulatory power of the Food
and Drug Administration (FDA) while slashing taxes on the pharmaceutical industry.
Participants at
Tuesday’s meeting included
Stephen Ubl, head of the drug industry trade
group
PhRMA, and the CEOs of Novartis,
Merck, Eli Lilly, and Johnson & Johnson.
Trump has
demagogically postured as a critic of the pharmaceutical industry, including
calling for rule changes to allow the federal government to use the bulk
purchasing power of Medicare to negotiate drug prices with pharmaceutical
companies.
“Pharma has a lot of
lobbies, a lot of lobbyists and a lot power,” Trump said at his first press
conference as president-elect on January 11. He said that it was necessary to
“create new bidding procedures for the drug industry, because they’re getting
away with murder.”
Trump has now
abandoned any pretense of opposition.
“We’re going to be
changing a lot of the rules,” Trump proclaimed prior to the meeting.
“I’ll oppose anything
that makes it harder for smaller, younger companies to take the risk of
bringing their product to a vibrantly competitive market. That includes
price-fixing by the biggest dog in the market, Medicare, which is what’s
happening,” Trump told reporters after the meeting, reversing his previous
position on allowing Medicare to negotiate prices and falsely stating that the
program currently does so.
“We’re going to be
lowering taxes, we’re going to be getting rid of regulations that are
unnecessary,” said Trump. He said that he wants to get rid of 75 or 80 percent
of FDA regulations.
Biotech and
Pharmaceutical stock shares rallied following the meeting, and Trump’s plan was
met with approval by the industry lobbyists and CEOs gathered at the meeting.
“Tax,
deregulation—those are things that could really help us expand operations,”
commented Eli Lilly CEO Dave Ricks, according to Reuters.
“These changes are going to be great for the country,” Celgene
Chairman Robert Hugin told the Washington Post.
The deregulation of
the FDA and the streamlining of the drug approval process will result in less
knowledge about the safety and efficacy of the drugs approved by the FDA.
“Streamlining drug approvals sounds good, but the agency has
already weakened approval standards and patients are paying the price—hugely
expensive drugs that don’t even work,” Diana Zuckerman, president of the
National Center for Health Research, told the New York Times.
Dr. Michael Carome,
the director of Public Citizen’s health research group, noted in a statement
that Trump’s proposal would “destroy the ability of the agency to protect
patients and consumers from unsafe or ineffective medications and medical
devices, hazardous foods and dietary supplements, and dangerous tobacco
products.”
“The end result would
be countless preventable deaths, injuries and illnesses across the US,” he
said.
These risks have already been heightened by the bipartisan
legislation passed late last year, the 21st Century Cures
Act. The Act significantly rolls back the regulatory authority of
the FDA, lowers the standards that must be met before a drug is approved, and
expands expedited
approvals.
The FDA will be
further hindered by Trump’s executive orders instituting a hiring freeze and
the rule that two regulations must be removed for every new one.
“That will cripple the FDA’s ability to do anything other than
regulate by non-binding guidance documents,” David Vladeck, a professor at
Georgetown University Law Center, told the Washington Post.
“To hollow out the
agency’s authority by forbidding it from dealing with emerging issues through
new regulations, and perhaps even giving guidance will jeopardize consumers and
threaten the reputation of the agency around the world,” Vladeck said.
Trump tied his
criticism of high drug prices to his “America First” rhetoric of economic
nationalism, attacking “global freeloading” through “foreign price controls.”
“Our trade policy
will prioritize that foreign countries pay their fair share for
U.S.-manufactured drug, so our drug companies have greater financial resources
to accelerate development of new cures, and I think that’s so important,” Trump
said.
Instead of allowing
Medicare to negotiate drug prices, which Trump referred to as “price fixing,”
he claimed that competition spurred by deregulation and tax cuts would bring
down drug prices.
This approach will do nothing to address skyrocketing drug prices
in the United States, which have doubled since 2011 and
are up to ten times higher in
the US than in other countries.
The pharmaceutical industry, which continues to consolidate through
mergers and acquisitions, is notorious for dodging competition when it
threatens the bottom line. For example, drug companies will often raise prices
almost simultaneously with their competitors, a practice known as “shadow pricing.” When
a drug is about to go off patent, companies will often pay potential generic
competitors to hold off on introducing generic versions in “pay-for-delay”
deals.
Moreover, there is little evidence that high drug prices are due
to the costs associated with researching and developing drugs. According to an
article published in August of last year in the Journal of the American
Medical Association, large pharmaceutical companies invest only 10 to 20 percent
of their revenue in R&D. The authors cite an analysis that looked at 26
products or product classes over the past 25 years and found that more than
half originated in publicly funded research centers.
The authors of the
article conclude that “there is little evidence of an association between
research and development costs and drug prices; rather, prescription drugs are
priced in the United States primarily on the basis of what the market will
bear.”
In response to
Trump’s meeting, Democrats continued to perpetuate illusions in the president’s
demagogic attacks on the pharmaceutical industry, with Senator Bernie Sanders
and Maryland representative Elijah Cummings issuing a joint statement saying
they “hope” Trump “really” takes on the industry.
“I look forward to
working with President Trump on this issue if he is serious about standing up
to the pharmaceutical industry and reducing drug prices,” Sanders said after
Trump’s meeting.
The Trump
administration has not yet named its nominee for FDA commissioner, who would be
charged with “streamlining” the agency. Four possible nominees have been
mentioned, all of whom favor weakening FDA regulations.
Jim O’Neill, an
associate of Trump transition adviser and Silicon Valley billionaire Peter
Thiel, is a managing director at Thiel’s Mithril Capital Management. He has
called for changing FDA regulations to allow pharmaceutical companies to begin
marketing drugs before they have been shown to be effective.
“We should reform FDA
so it is approving drugs after their sponsors have demonstrated safety, and let
people start using them at their own risk, but not much risk, of safety,”
O’Neill said in a 2014 speech.
Balaji Srinivasan,
another Thiel associate, is the CEO and co-founder of 21 Inc., which develops
software and hardware for bitcoin micropayments, and was a co-founder and chief
technical officer at Counsyl, a company that developed a prenatal genetic test
for chromosome-related birth defects.
“Drug development
shows that modern regimen is not necessary for safe innovation,” Srinivasan
said in a tweet in December.
Scott Gottlieb is a
former FDA deputy commissioner and venture capitalist who has worked with
numerous drug companies. He is currently a resident fellow at the conservative
American Enterprise Institute.
Finally, the Trump
transition team has spoken with Dr. Joseph Gulfo about possibly heading the
FDA. Gulfo, a former CEO of drug and medical device companies, has criticized
the FDA for delaying approvals by requiring clinical trials demonstrating that a
drug is effective, and has called on the FDA to rely more on “biomarkers”
rather than actual clinical outcomes. He says that any attempts to impose price
controls on drugs would be “punishing” the pharmaceutical industry.
The positions of the
potential nominees are at odds with a report released by the FDA last month
showing that reducing drug approval standards would pose greater financial and
health risks for patients.
The report
highlighted 22 case studies of drugs, vaccines and medical devices tested since
1999 where promising data from smaller and shorter phase 2 clinical trials,
which often rely on biomarkers instead of clinical outcomes, diverged from the
larger phase 3 randomized controlled trials. The phase 3 studies failed to
confirm phase 2 findings on effectiveness (14 cases), safety (1 case), or both
(7 cases).
“As a result of the
Phase III studies discussed in this paper, patients outside of clinical trials
were not subjected to drugs that would not benefit them or to the risk of
unnecessary serious toxicities, and did not suffer unnecessary financial
expenditures. Where effective alternative therapies existed, they were not
diverted from proven treatments; where an implanted medical device was at
issue, patients were spared unnecessary surgical procedures,” the report
concludes.
SWAMP DWELLER TRUMP ASSAULTS MEDICAID AND MEDICARE
Opponent of Medicaid,
Medicare sworn in as Health and Human Services secretary
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